By Devayani Sathyan and Vuyani Ndaba

BENGALURU/JOHANNESBURG (Reuters) - Most emerging market currencies will hold the gains they have made this year or extend them against a retreating dollar in the next six months as traders ditch the U.S. exceptionalism trade that fuelled the greenback's dream run, a Reuters poll of FX strategists found.

At the start of the year, emerging market currencies looked set for a rough ride on expectations of U.S. economic strength and delayed Federal Reserve interest rate cuts as well as trade tensions.

But they have since defied expectations as U.S. President Donald Trump's broader-than-expected but erratically implemented tariff together with a deteriorating fiscal outlook have sparked a flight from the dollar and U.S. assets.

That is expected to continue, with more than half the currencies polled forecast to trade in tight ranges or gain, while the rest were expected to give back only a small portion of this year's strong gains, according to a May 30–June 4 poll of more than 50 foreign exchange strategists.

"The path of least resistance is a mildly weaker dollar at the moment," said Christopher Turner, head of FX strategy at ING.

"We think (the decline) will be sort of modest and gradual and that should keep the mindset for investors to buy EM currencies on dips and that's kind of what we're seeing at the moment."

Separately, the dollar has become a preferred funding currency as Trump's trade war fuels recession fears and outflows from U.S. assets.

The EM carry trade - borrowing in low-yielding currencies to invest in higher-yielding EM ones - has long attracted investors chasing returns.

High-yielders like the South African rand and Brazilian real are up around 6.0% and 10.0% respectively this year. The real was predicted to lose only about 2.0%, while the rand is likely to trade in a tight range over the next six months.

"I think the trend for emerging market currency outperformance can continue in the second half of this year, but there are downside risks to be wary of as well," said Lee Hardman, senior currency economist at MUFG, referring to trade disruption and the potential hit to global growth.

The Turkish lira, the weakest-performing emerging market currency so far this year, is projected to soften by another 8.0% from 39 per dollar to 42.8/dollar over the next six months.

In Asia, the heavily managed Chinese yuan is expected to stay rangebound despite widespread concerns about weak demand in its economy, and a standoff with Washington over tariff policy and export controls.